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THQuestion
Level 1

Payroll

Hello,

 

One of my clients bills their W-2 employees essentially by the project. They clean animal's teeth, and the employees get paid by the dog on a biweekly basis. However, they are not 1099 contractors, as the employer supplies them with all necessary equipment, the employees travel to the employer's set destination, the work is continual as in every month they are required to go to the same areas to clean teeth, etc.

 

So my question is, in QB, they do not receive a set salary nor do they receive a houry wage. I would have to adjust their earning every 2 weeks when they are paid. Would this be done best by using the commission payroll function? If so, are there any tax implications that I would have to worry about? Or would I just have to adjust their salary amount each pay period in order to give them their correct wage so the correct amount of payroll taxes are taken out? Thank you for your help.

3 Comments 3
KlentB
Moderator

Payroll

Hello there, THQuestion. I can help you in handling these transactions.

 

Both options will do the trick. It depends on you how you'd like to record the transactions in your account. We can set up commission as an employee's salary or additional pay. This way, you'll be able to give them their correct wage based on their sales performance or completion of a task. You can follow the steps I've listed below:

 

Setting up commission as an employee's salary:

 

  1. Select Payroll from the sidebar menu, then go to the Employees tab.
  2. Choose the appropriate employee.
  3. Click the Edit icon next to Pay.
  4. In the How much do you pay employee section, select the drop-down arrow and choose Commission Only.
  5. Hit Done to complete the process.

Setting up commission as an additional pay:

 

  1. Select Payroll from the sidebar menu, then go to the Employees tab.
  2. Choose the appropriate employee.
  3. Click the Edit icon next to Pay.
  4. In the How much do you Pay employee section, select the Edit icon  or +Add additional pay types.
  5. Choose Commission.
  6. Select Done.

Once you're done, you can read this article to learn how to pay your employees using commission only paycheck or along with their regular pay.

 

For the tax implications, I'd recommend reaching out to a professional tax advisor to ensure compliance. Though, you can also manually adjust their salary amount  if you don't want to pay them using a commission.

 

In case you'll need to track how your business is doing in terms of employee expenses, we run the payroll reports.

 

Feel comfortable to drop a comment below if you've further questions or any other concerns. We're open 24/7 and always ready to help.

ftpbooks
Level 2

Payroll

When using the commission tab, I see no option to do a percentage calculation.  My client has people see pays at various percentage of sales, 45%, 50%, etc.  She does not want to have to calculate these amounts herself.  She has QB desktop and is now switching to online payroll.   For instance, if she has someone on 45% commission for $1000 sales, she wants payroll to enter the correct amount is she puts in the $1000 sales.

 

We have options like this is the deduction section for percentages, why not income?

JasroV
QuickBooks Team

Payroll

Nice to have you joined this thread, @ftpbooks.

 

I appreciate you taking the time to share your thoughts on calculating sales percentages in QuickBooks Online (QBO).

 

While the option isn't available in QBO, you'll want to have your client utilize a third-party app that calculates their sales percentage. Simply have them hover to the Apps menu and look for an app from there.

 

I understand having the option to calculate sales percentage is beneficial to your business. With this, I recommend sending your feedback to our Development team. This allows them to read your suggestion and might consider implementing it in future updates.

 

Here's how:

 

  1. Go to the Gear icon.
  2. Select Feedback.
  3. Enter your comments or product suggestions. 
  4. Then select Next to submit feedback.

 

Once you're all set, I got you this article that can help you manage your payroll: Process or run payroll.

 

I'm always here if you need more help with your income and payroll. Our door is always open for you. Take care!

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